Competition and Markets Authority
Anti-competitive arrangements in the financial services sector - CMA updates case timetable - 21 May 2020
The Competition and Markets Authority (CMA) has updated its case timetable in relation to its ongoing investigation into suspected anti-competitive arrangements in the financial services sector which may infringe Chapter I of the Competition Act 1998. The CMA launched its investigation in November 2018 and originally indicated that its initial investigation would last until August 2019. The case timetable has been updated to state that the initial investigation, including a review and analysis of the information gathered, is now expected to continue until December 2020.
CMA webpage on its investigation into anti-competitive arrangements in the financial services sector
Recent cases
Burford Capital Ltd v London Stock Exchange Group plc, [2020] EWHC 1183 (Comm), 15 May 2020
Norwich Pharmacal jurisdiction - market confidentiality - market manipulation - spoofing and layering - Market Abuse Regulation (596/2014/EU) (MAR)
Burford Capital Ltd brought a ‘Norwich Pharmacal’ claim against the London Stock Exchange Group plc (LSE), in which it sought the disclosure of the identities of market participants involved in trading Burford’s shares. Burford shares are publicly traded on AIM, which is owned and operated by LSE. A ‘Norwich Pharmacal’ order is a disclosure order which requires that a third party who is, albeit innocently, ‘mixed up’ in the wrongdoing discloses information as to the identity of the wrongdoer.
On 6 and 7 August 2019 Burford’s shares were the subject of short-selling. During the relevant period Burford’s share price collapsed. Burford claimed that the collapse was due not only to the short selling, but also because the share price had been depressed by unlawful market manipulation. LSE claimed that it had independently analysed the trading across the relevant period and had concluded, contrary to Burford’s allegations, that there was no evidence of market manipulation.
Following a remote trial, the Court dismissed Burford’s claims that it had “a good arguable case” that market manipulation had occurred. In rejecting the claims, Baker J noted that anonymity “is also precisely why public analysis and allegations of market manipulation can be flawed. That is primarily and simply because public participants do not know the trading positional data associated with the orders they observe. This leads frequently to erroneous accusations of manipulation, when in fact the orders are genuine – as is the case here. Errors such as failures to account for algorithm behaviour; lack of understanding of execution algorithm strategies; or a general lack of knowledge related to order or trade types are commonly made by market participants alleging spoofing and layering”.
Through its judgment, the Court has taken a stance to strengthen public confidence in trading in the UK by deciding to give priority to the protection of the confidential trading strategies of market participants.
Burford Capital Ltd v London Stock Exchange Group plc [2020] EWHC 1183 (Comm)
